Why GMR Airports Share Price is Rising

India's air travel sector is experiencing remarkable growth, driven by increasing disposable incomes, urbanisation, and a burgeoning middle class. More people are flying than ever before, boosting demand for airport infrastructure and services.

GMR Airports, a key player in this industry, is capitalising on this trend, managing some of the busiest airports in the country.

No wonder GMR Airports share price is taking off like a well-planned flight, reflecting the booming air travel industry in India.

In 2024, the stock has soared by 19.7%, with a significant 9.1% climb in just the last month. This upward trajectory mirrors a plane gaining altitude smoothly and steadily, propelled by favorable winds.

Let's take a look at the factors driving the rally.

#1 Air Traffic Update May 2024

GMR Airports continued its growth trajectory in May 2024. It handled over 10.8 million (m) passengers across all its airports, a 7% increase year-over-year (YoY). Both domestic and international traffic saw healthy growth, with domestic rising 5% YoY and international surging by 17% YoY.

Delhi Airport achieved its second-highest monthly passenger volume ever in May, handling over 6.5 m passengers, up 8% YoY. International traffic at Delhi grew at a faster pace (16% YoY) compared to domestic (5% YoY).

Hyderabad Airport also reached a new milestone, recording its highest monthly passenger traffic ever at over 2.4 m passengers, reflecting an 11% YoY increase.

This strong passenger traffic performance translates to positive revenue growth for GMR Airports, solidifying its position in the Indian aviation industry.

#2 New Acquisition

In April 2024 GMR Airports acquired 8.4% stake in Waisl. Waisl is engaged in the business of delivering end-to-end digital infrastructure at airports and also operates as an exclusive partner for IT services at airports.

The acquisition was done from Utthishta Virat Fund, for a total consideration of Rs 566.6 m. The company is exploring opportunities of investing in entities engaged in Airport adjacencies or airport-related businesses.

Waisl's expertise can be used to streamline processes across GMR Airports' facilities. Imagine smarter check-in systems, efficient baggage handling, and real-time flight information for passengers. This not only improves efficiency but also enhances the passenger experience.

Integrating Waisl's solutions can create a more connected airport environment, benefiting airlines, concessionaires, and passengers alike.

Overall, this acquisition aligns with GMR Airports' strategy of expanding its airport-related businesses.

#3 Good Financial Performance

Fuelled by strong demand in the travel sector, GMR Airports' total sales reached Rs 92.1 billion (bn) during FY24, a significant increase of 26.7% compared to Rs 72.7 bn reported in FY23.

This positive revenue growth was accompanied by a narrowing of net losses. The company's net loss in FY24 fell by 2.4% to Rs 8.3 bn.

However, it's important to note that the rate of revenue increase outpaced the reduction in net losses. This discrepancy is likely due to a significant increase in the company's finance costs.

What Next?

GMR Airports is on track for success. It has a strong foundation and exciting plans for growth.

It's building on a strong foundation and a series of exciting growth strategies.

The company operates in key Asian markets, especially India, where aviation is expected to experience significant growth averaging 7% annually until 2040. This positions the company to benefit from the expected increase in passenger traffic.

The company leverages a mature tariff regime for its aeronautical revenue, ensuring a stable cash flow profile. Notably, the upcoming tariff determination at Delhi Airport post-expansion will significantly impact this revenue stream.

To tap into non-aeronautical revenue opportunities, it is developing its 'GAL Platform' to focus on businesses adjacent to airports, capitalising on India's strong consumer base.

The company holds a substantial portfolio of valuable real estate parcels exceeding 2,000 acres. This embedded growth potential translates to future opportunities for the company.

With expansions at Delhi, Hyderabad, and Goa nearing completion, GMR Airports can expect improved earnings before interest, taxes, depreciation, and amortisation due to organic growth.

It has a multifaceted approach to future success. Its aims to exploit hub opportunities, expand its geographical presence by acquiring new airports, and leverage its proven track record of strategic partnerships with renowned names like Groupe ADP, Fraport, and NIIF.

While GMR Airports has a promising future, it's crucial to acknowledge its current financial situation. It is currently operating at a loss and has significant debt.

Its debt has increased by 19% year-over-year in FY24. Investors should consider these financial realities alongside the company's growth potential.

How GMR Airports Share Price has Performed Recently

In the past five days, GMR Airports share price dropped 0.6%. In the last month, it is up 9.1%.

In 2024, so far its share price has surged 19.8% and its up 127.2% in the last year.

The stock touched its 52-week high of Rs 100.7 on 19 June 2024 and a 52-week low of Rs 41.3 on 26 June 2023.

About GMR Airports

GMR Airports is a leading global airport developer possessing a marquee airport asset portfolio.

GMR Airports is the largest private airport operator in Asia and 2nd largest in the world, with a passenger handling capacity of over 189 m annually.

GMR Airports, a subsidiary of GMR Airports Infrastructure (formerly known as GMR Infrastructure), has Groupe ADP as its strategic partner, holding a 49% stake.

GMR Airports operates the Delhi Airport, one of the largest and fastest-growing airport in India. It also runs Hyderabad Airport and operates Manohar International Airport, Goa (Mopa).

For more details, see the GMR Airports company fact sheet and quarterly results.

You can also compare GMR Airports with its peers.

GMR Airports vs HCC

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